Can the New Housing Bill Fix the Foreclosure Mess?

When the $300 billion housing bill was signed into law last week, many experts and analysts are torn between whether it will be able to fix the mess left by the foreclosure crisis.

In Washington, proponents of the controversial legislation are adamant that it will be able to stabilize most neighborhoods. For them, this is possible with the $4 billion budget that will be given to neighborhoods hit hardest by the foreclosure crisis.

Unfortunately, for the opponents of this particular provision, it is not enough. For them the sheer volume of abandoned homes is just overwhelming. The paltry budget will not be able to make a dent especially considering the estimated 3 million homes that will enter some stage of foreclosure by the end of the year.

Right now, there is no telling which side has given the right assessment of the situation. With the new housing bill scheduled to be implemented starting October 1, time can only tell.

In the meantime, HUD is in charge of coming up with a method of distributing the $4 billion budget to these neighborhoods nationwide. The distribution will be based on the foreclosure rate, wherein the number of homes in default, percentage of subprime loans and actual foreclosures will be considered.

The said budget will be utilized by local governments for the fixing up of these abandoned foreclosure homes and selling them at an affordable price. Some of the money will also be directed to the demolition of damaged structures and re-development of vacant lands.

Also, the said fund will allow communities to somehow recover form the negative impact of the numerous foreclosure properties, which have driven down home values and caused home sales to slow down.

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